Apple Wins Digital Music Antitrust Trial

Apple Inc (NASDAQ:AAPL) won an antitrust trial on Tuesday when a U.S. jury decided the company did not act improperly when it restricted music purchases for iPod users to Apple's iTunes digital store.

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The verdict was read in an Oakland, California federal court. The plaintiffs, a group of individuals and businesses who purchased iPods from 2006 to 2009, sought about $350 million in damages from Apple alleging the company unfairly blocked competing device makers.

Patrick Coughlin, an attorney for the plaintiffs, said "the jury called it like they saw it."

In a statement, Apple applauded the verdict. "Every time we've updated those products — and every Apple product over the years — we've done it to make the user experience even better," the company said.

Jurors deliberated for only a few hours on the sole question of whether the update had benefited consumers. Under U.S. law, a company cannot be found anticompetitive if a product alteration was an improvement for customers.

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Since jurors agreed with Apple, they did not have to decide any other legal issues or damages. Jurors declined to answer questions after the verdict.

The trial included video deposition testimony given by Apple co-founder Steve Jobs shortly before he died in 2011.

Apple faced a challenge in the online music market from Real Networks, which developed RealPlayer, its own digital song manager, plaintiffs claimed. It included software which allowed music purchased there playable on iPods as well as competing devices.

Apple eventually introduced a software update that restricted the iPod to music bought on iTunes. Plaintiffs say that step discouraged iPod owners from buying a competing device when it came time to upgrade.

Apple argued the software update was meant to improve the consumer experience and contained many desirable features, including movies and auto-synchronization.

The case in U.S. District Court, Northern District of California is The Apple iPod iTunes Anti-Trust Litigation, 05-37.